Interpretations that would result in a more satisfying experience

CHAPTER 8 
WORKING WITH YOUR BELIEFS 
 
Now the task before you is to properly integrate the five fundamental truths presented in Chapter 7 in 
your mental environment at 
a 
functional level. To help you do that, we will take an in-depth look at 
beliefs—their nature, properties, and characteristics. However, before we do that I will review and 
organize the major concepts presented thus far into a much clearer and more practical framework. What 
you learn from this and the next two chapters will form the foundation for understanding everything 
you need to do to achieve your goals as a trader.
DEFINING THE PROBLEM 
At the most fundamental level, the market is simply a series of up and down tics that form patterns. 
Technical analysis defines these patterns as edges. Any particular pattern defined as an edge is simply 
an indication that there is a higher probability that the market will move in one direction over the other. 
However, there is a major mental paradox here because a pattern implies consistency, or, at least, a 
consistent outcome. But the reality is each pattern is a unique occurrence. They may look (or measure) 
exactly the same from one occurrence to the next, but the similarities are only on the surface. The 
underlying force behind each pattern is traders, and the traders who contribute to the formation of one 

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pattern are always different from the traders who contribute to the next; so the outcome of each pattern 
is random relative to one another.
Our minds have an inherent design characteristic (the association mechanism) that can make this 
paradox difficult to deal with. Now these edges, or the patterns they represent, flow by in every time 
frame, making the market a never-ending stream of opportunities to get in, get out (scratch a trade), 
take profits, cut losses, or add to or detract from a position. In other words, from the market's 
perspective, each moment presents each one of us traders with the opportunity to do something on our 
own behalf.